2000 Year-End Tax Planning
For Individuals
The following are generally applicable year-end
tax-saving tips for individuals. However, individual circumstances can have a significant
impact on the appropriateness of tax strategies for a particular person. Contact us for a
tax-planning meeting where we can discuss which approach would be best for you.
- Make sure you are not overlooking any deductions, such
as the annual amortization of points paid when you refinanced your mortgage, or the
mileage allowance if you use your car to travel for medical treatment.
- If you're having trouble meeting the threshold for
medical expenses or miscellaneous deductions, consider timing discretionary expenses so
that you accumulate enough to itemize one year but not the next. Remember that starting in
1997, long-term care expenses and a limited amount of long-term care insurance premiums
can be included with your regular medical expenses.
- Another area to review as year-end approaches is
charitable giving. Consider writing an extra check to each charity before the end of 2000.
If you itemize deductions, you will generally realize the tax benefit from your
contributions this year instead of next year. Also check your records to make sure you
have a written acknowledgment from the charity for any donation of $250 or more.
- Don't overlook a deduction for mileage (14 cents a
mile) or parking fees in connection with your charitable work.
- If you will be itemizing, be sure that your property
taxes are paid before the end of the year. Not only will you get a discount, but they can
be deducted as well.
- Even though it doesn't directly affect taxes, make
sure you use up any amounts you have set aside for medical care or child care in flexible
spending accounts in your employer's cafeteria benefit plan. Any unused amounts in these
accounts are forfeited at year-end.
- Make sure you're having enough tax withheld to avoid a
penalty. You must have paid 90% of your 2000 tax liability or 100% of your 1998 liability
(106% for higher income taxpayers). If necessary, change your withholding for the rest of
the year or make an estimated tax payment by January 15th.
- Be aware of your individual situation in regards to
the AMT. If you are subject to this tax, different suggestions probably apply. Check with
us regarding specialized tax planning in this situation.
- If you are taking distributions from an IRA or other
retirement plan, the amounts and timing of your distributions can have important tax
consequences.
© Copyright 2000 Raymond S. Kulzick. All rights reserved.
001124.
This publication provides business, financial planning,
and/or tax information to our clients. All material is for general information only and
should not be acted upon without seeking appropriate professional assistance.
Contact rkulzick@kulzick.com with
questions or comments about this web site.
Copyright © 2000 Kulzick Associates, PA - Last modified: September 13, 2008